Auto Repair Shops Seeing Success With ‘Buy Now, Pay Later’ Options
Buy now, pay later options have seen a lot of success with businesses—particularly in the auto repair sector, according to Modern Retail.
Auto repair shop software Tekmetric offers customers different options for how to pay for their bill. As of this fall, Tekmetric has seen around 5% of its transactions processed through Klarna or Affirm, two BNPL platforms.
The option for customers to pay in installments has led to shops being able to sell more, too. Since Tekmetric first introduced BNPL options for its user base in August, customers who chose BNPL spent around three times more than the average customer.
On the flip side, BNPL platforms are seeing great success from their participation in the auto repair space, with Klarna revealing this fall it’s had a 167% year-over-year growth in auto services. Affirm has experienced a 30% year-over-year growth in the auto aftermarket sector and over $5 billion in transactions.
Payment technology platform Equipifi, which works with banks to implement BNPL options, researched data on checking accounts and found that from Nov. 28 through Dec. 2, around 7.1% of all BNPL transactions—regardless of company—were related to automotive services.
Neil Patel, VP of payments at Tekmetric, said that BNPL options help shops with making sales, while also relieving some of the burden on vehicle owners.
“If you think about the payment experience being the customer experience, it’s the first touch point where you can say, ‘Okay, let me help you with that,” explained Patel. “How do we make this better for you so that you’re not feeling a negative way about [making car repairs]? And so BNPL was a natural extension of that.”
